9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 456 - AT - Income TaxLevy of penalty u/s. 271B - assessee did not file the Audit Report as required u/s. 44AB of the Act, on or before due date - HELD THAT - Admittedly, it is a well settled principle of law by the decision of P. Senthil Kumar v. 2019 (1) TMI 222 - MADRAS HIGH COURT where considering the decision of Hindustan Steel Ltd. 1969 (8) TMI 31 - SUPREME COURT held that non-filing of Audit Report on or before due date, is a technical breach and admittedly, when such Tax Audit Report has been filed before assessment was passed by the AO, the question of levy of penalty u/s. 271B of the Act, does not arise. The ITAT Chennai Benches in the case of Rajendran Sreedharan 2023 (4) TMI 1253 - ITAT CHENNAI had considered an identical issue and held that when the Tax Audit Report was made available to the AO before he completes assessment u/s. 143(3) of the Act, then penalty u/s. 271B of the Act, cannot be levied for delay in filing of such Audit Report. In this case, there is no dispute with regard to the fact that the assessee, although, filed Tax Audit Report beyond due date prescribed under the Act, but such Audit Report has been filed before the AO completes the assessment. Therefore, we are of the considered view that the AO is erred in levying penalty u/s. 271B of the Act, for non-furnishing of Tax Audit Report, and thus, we direct the AO to delete the addition made towards penalty levied u/s. 271B of the Act. Decided in favour of assessee.
Issues:
The case involves the issue of non-furnishing of Tax Audit Report on time leading to the levy of penalty under section 271B of the Income Tax Act, 1961. Summary: Issue 1: Assessment of Penalty under Section 271B for Delay in Filing Tax Audit Report The appellant, an individual, filed the return of income for AY 2018-19 admitting a total income of Rs. 2,91,990. The Assessing Officer (AO) observed that the Tax Audit Report, required under section 44AB of the Act, was not submitted by the due date. A penalty of Rs. 1,50,000 was imposed under section 271B for this non-compliance. The appellant contended that the Audit Report was filed before the completion of assessment by the AO, and any delay should be considered a technical error not warranting a penalty. Issue 2: Appeal before CIT(A) and Confirmation of Penalty The appellant appealed to the Commissioner of Income Tax (Appeals) (CIT(A)) against the penalty order. The CIT(A) upheld the penalty, stating that the Audit Report was filed after the due date prescribed by the Act. The appellant then approached the ITAT Chennai challenging the CIT(A)'s decision. Issue 3: ITAT Chennai's Decision and Rationale The ITAT Chennai noted that the Audit Report was indeed filed before the completion of assessment by the AO. Referring to legal precedents, including a decision by the Hon'ble Madras High Court, it was established that non-filing of the Audit Report by the due date is a technical breach. The ITAT held that since the Report was submitted before the assessment was finalized, the penalty under section 271B was unwarranted. Citing a previous case with a similar scenario, the ITAT directed the AO to delete the penalty imposed. Conclusion: The ITAT Chennai allowed the appeal, emphasizing that the penalty under section 271B for the delay in filing the Tax Audit Report was not justified. The decision was based on the principle that when the required report is submitted before the completion of assessment, penalties for such delays should not be imposed. This summary captures the key issues, arguments presented, decisions made, and the legal rationale behind the judgment without disclosing any specific party names.
|
